Content Writing

How Leading CPGs Are Growing: Four Practical Levers to Accelerate CPG Growth

Writer / Author Christopher Vickers, Atlanta-based Brand, Advertising + Content Marketing & Communications Strategist & Creator

While CPG manufacturers’ market positions vary, there is a common thread among the leaders: they have aggressively begun changing their focus from cost reduction to more holistic, profitable growth. CXOs at leading CPG companies have an intimate understanding of what consumers want across industries, continuously monitor external trends and assess their business operations through a critical lens. They’ve begun translating these forward-looking insights into the following strategies for reinvesting in growth.

Getting closer to customers - With the proliferation of social media and multiple digital engagement channels, the ability to influence and impact purchase has increased substantially. Industry winners excel at using data and analytics to closely monitor shifting consumer preferences across channels. Furthermore, they funnel these insights throughout their organizations to augment core capabilities, such as innovation, shopper marketing and pricing. A large, global snack food manufacturer is using predictive analytics to analyze multiple categories and customer segments. Through data diagnostics, statistical modeling and a what-if simulation dashboard, the company is gaining clearer insights on past performance, seizing new opportunities for optimizing trade spend, and it can plan for the future with the help of predictive planning and selling..

Revamping offerings - Leaders regularly innovate across a wide range of offerings—ranging from making packaging more convenient to expanding into cross-category bundling—to ensure they remain ahead of the competition in the eyes of their target consumer. For example, one leading confectionary manufacturer developed stand-up, re-sealable pouches that use less shelf space while some major CPG companies have pursued joint ventures to expand offerings and branch into new territories which indicates a strategy of targeting the changing preferences of mass-market consumers.

Choosing the right channels - Leaders do not follow the pack—they determine the optimal channel mix for their specific business. Those determinations are based on what consumers want and what the portfolio strategy demands. Go-to-market structures and investments should align with these channels to drive sales. Macro trends, such as shifting demographics (e.g. the rise in 55-plus, urban and Hispanic consumers), are pushing CPG companies to tailor their offers in the respective preferred channels in order to penetrate these segments, drive volume and build brands. Some high performers are executing tailored approaches for unique channels. It's anticipated that the strongest growth will come from non-traditional channels.

Preparing for the future - the CPG market is changing dramatically and rapidly. Cost-cutting has become a “way of life” for almost all CPGs as they work to improve margins. However, the new reality is that CPG businesses must get the most out of the scarce dollars they have by becoming more sophisticated about how dollars are allocated to categories, and how the business model can support those strategic decisions. Cost-cutting is necessary, however investing in business model innovation and enacting portfolio shifts that drive growth and bolster the long-term business strategy are equally important.

Charting the right course will only become more important in the future, as consumer expectations around products and channels continue to rapidly evolve. The strongest players will make bold moves early—and often—to allow sustainable growth.

References: Progressive Grocer